Economy

Wall Street is paying the price for walking back its pandemic hiring spree, with the biggest US banks spending more than $1bn on severance costs in the first half of this year.Goldman Sachs, which has been hit particularly hard by a slowdown in trading and investment banking, is the latest to take a charge for recent job cuts. Yesterday, it told investors it had spent $260mn in severance costs in the first six months of 2023. The bank has laid off about 3,400 employees, or about 7 per cent of its overall staff, this year.On Tuesday, Morgan Stanley, which has let about 3,000 employees go this year, said it had spent more than $300mn on staff reductions. Citigroup last week said severance cheques had added $450mn to its expenses. The bank announced last month that it had nearly completed 5,000 job cuts.“I think there is going to be more right-sizing in investment banking,” said Michael Karp at Options Group, a Wall Street headhunter. “For the rest of the year, it’s going to be a fire-two-to-hire-one situation at most of the big firms.”Deutsche Bank: The German lender has been fined $186mn by the US Federal Reserve over a “material failure” to fix “unsafe and unsound banking practices” which the bank had promised to sort out as early as 2015.Here’s what else I’m keeping tabs on today:FedNow: The Federal Reserve will launch its new real-time payments system called FedNow that will enable Americans to move money in a matter of seconds. The system is the biggest upgrade to the country’s financial plumbing in decades.Earnings: Johnson & Johnson will kick off earnings season for the pharmaceutical industry, and report quarterly results for the first time since it spun off its consumer business, Kenvue. Analysts anticipate J&J to have earned $1.97 a share in the quarter, which would represent 9 per cent in annual profit growth.Economic data: Initial US state unemployment claims, considered a proxy for lay-offs, are expected to have ticked up to 242,000 last week from 237,000 the week before. Meanwhile, existing home sales for June are forecast to have declined to 4.2mn from 4.3mn in May.Five more top stories1. Foreign inflows to Asian emerging equity markets outside China surpassed the world’s second-largest economy for the first time in six years to reach $41bn. This outstripped net inflows of about $33bn into mainland Chinese equities via Hong Kong’s Stock Connect trading scheme, according to Goldman Sachs data. Here’s our full analysis.China billionaires: The country’s typically low-profile tycoons, including Tencent founder Pony Ma, have issued similar statements praising the government’s pivot away from cracking down on private enterprises. 2. Tesla’s profit margins slipped in the latest quarter after a series of price cuts this year but still performed better than analysts’ forecasts. Chief executive Elon Musk suggested there could be more price reductions to come for the electric-car maker, which reiterated its goal of selling 1.8mn vehicles this year.3. A crackdown on password sharing helped Netflix add nearly 6mn subscribers, more than double what analysts had forecast and validating the streamer’s strategy to shore up its business. But the company’s shares dropped by more than 8 per cent in post-market trading after revenues fell short of expectations.4. Exclusive: More of EY’s work outside the US is failing inspections by American regulators. The firm estimates inspections have uncovered deficiencies in up to 38 per cent of the audits done by its overseas businesses last year. This would be a big jump from 21 per cent in 2021. Here’s why regulators are alarmed.5. Wirecard’s former second-in-command Jan Marsalek has claimed the company’s Asia operations are still active. German authorities believe the company’s Asia division was fraudulent, but Marsalek claims the section of the business was resilient and at one point did not depend on Wirecard at all for sales, finance or technology. News in-depth

When Meta launched its new social network Threads earlier this month the man in charge of the platform, Instagram boss Adam Mosseri, said it was “not going to do anything to encourage” news on the platform. More widely Meta is trying to move away from supporting news. The company is currently in a stand-off with the Canadian government over pulling news-related content from the region just as the country mandated publishers are paid when their work is used. We’re also reading and watching . . . Military briefing: Russia’s vast and dense minefields have posed the most daunting obstacle yet for Ukraine’s counteroffensive.The Taylor Swift effect: Rivalry between Hong Kong and Singapore has always been hot, but tour plans by pop stars are throwing a new light on the competition between the two cities.Online reviews: There are three kinds of lies on the internet, writes Jemima Kelly: lies, damned lies and one-to-five-star ratings.🎬 Crispin Odey: Watch the FT’s film on the fall of one of Britain’s most successful hedge fund managers in a story of greed, secrecy and alleged abuse.Chart of the dayWhile it’s economy has had a sluggish start to the year China has been importing record volumes of oil, primarily from Russia. Analysts are divided over exactly why: Beijing could be worried about geopolitical tensions threatening its energy security, or it could just be taking advantage of cheap costs while it can.

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On July 10 a volcanic fissure in Iceland began spewing lava, within 24 hour authorities had opened a footpath that tourists could trek to take selfies next to the eruption. Take a look inside the growing tourist trend of watching volcanic activity live. Additional contributions by Tee Zhuo and Benjamin Wilhelm More

BUDAPEST (Reuters) – Hungary’s annual inflation will slow to 7-8% by December from 20.1% in June, helping the economy rebound, Finance Minister Mihaly Varga told Reuters, adding that no further measures were needed to contain the budget deficit for now.Prime Minister Viktor Orban’s government is struggling with the highest inflation in the European Union, a cost-of-living squeeze that has eroded household purchasing power and slammed the brakes on consumption.In an interview on Wednesday, Varga said curbing inflation was also key to containing the deficit, which has seen energy subsidies, pension and debt service costs surge, widening the cash-flow based gap to about 85% of the target by end-June.”By December for sure, but if we are lucky, inflation will be below 10% already in November. I can say that inflation will be around 7-8% by December,” Varga said.”I’m optimistic that this region has enough potential that if it can overcome the energy situation and inflation then … the CEE (Central European) countries can again be the fastest growing economies in the European Union.”The government expects the economy to grow by just 1.5% this year, but pick up to 4% next year. Analysts have warned that sliding consumption would reduce tax revenues and the deficit will overshoot the target unless the government takes additional measures to contain spending.Varga said it would be too early to take steps on spending.”For the time being, I see no reason for such measures… in September we will have a review and if needed, the government will take measures. I’d like to leave the (3.9%) deficit target intact,” the minister said, adding the government was also sticking with its 2.9% deficit goal for 2024.To this end, he said the government would amend the central bank law effective Jan. 2024 to avoid having to cover the bank’s losses from the budget. The government will discuss the planned changes with the European Central Bank soon, he said.”We have agreed with the National Bank of Hungary that we propose a solution to the ECB that … would allow the NBH to correct its losses over the medium term, that means about 3-5 years,” Varga said. “Having a negative equity poses no threat to the operation of the central bank.”STABLE FORINT NEEDEDAfter recording big gains from quantitative easing for years, several central banks have recently reported losses as interest rates rose, including the NBH which had to launch an emergency 18% one-day deposit in October — the highest in the EU — to shore up the falling forint. The bank has since reduced the rate to 16% but it says easing will be gradual.Varga said a stable forint was crucial for economic players to be able to plan ahead and the concept that a weak currency was needed to boost exports “was a notion of the past,” chiming in with recent NBH comments.”Our problem is when the forint weakens 20 forints in a week, by 4%, then nobody can plan,” he said.”If interest rates come down theoretically it is conceivable that the exchange rate would weaken … but if the other segments of the economy improve ….then the NBH’s monetary policy strategy that it reduces rates in 100 bps steps by the year-end, taking the base rate to 10% — it could work without the exchange rate producing swings, remaining stable.”The forint has firmed to 379 versus the euro from all-time lows of 430 in October, supported by high rates.The central bank will hold a rate meeting on July 25 where it is expected to cut the one-day deposit rate again by 100 basis points, to 15%.When asked how Hungary would cope if the EU — which has a rule-of-law dispute with Orban — does not disburse suspended EU funds this year, Varga said he expected both recovery funds and cohesion funds to start flowing.”I trust that we will not have to prepare an fx bond issue, so talks on EU funds will accelerate,” he said. More

WASHINGTON (Reuters) – Ford Motor (NYSE:F)’s announced price cut this week for the electric version of its F-150 truck was attributed to a number of factors, including competition among manufacturers, an oversupply of vehicles, and confusion about federal tax credits.But it also showed how a gradual return to pre-pandemic norms offers the Federal Reserve a fighting chance at lowering inflation without ruining the job market or causing a recession, a scenario dubbed the “soft landing.”The healing of supply chains has allowed output to grow, even as still-healthy consumer balance sheets buoy demand. The result: Both output and sales have remained strong even as the pace of price increases has declined, a realignment of the inflation-inducing situation seen during the coronavirus pandemic when consumers were even more flush with cash and companies couldn’t keep up.The U.S. central bank’s battle with inflation isn’t over, and developments like Russia’s recent disavowal of a grain export agreement with Ukraine could still make things worse.An important measure of inflation, the personal consumption expenditures price index excluding food and energy, has been stuck at around 4.6% for six months, more than double the Fed’s 2% target. But across the economy there are signs of pandemic-era imbalances being righted – not in a pure return to what existed before or in a fully unfamiliar “new normal,” but in a hybrid that for now is allowing inflation to cool while the economy keeps growing.The Atlanta Fed’s GDPNow outlook for U.S. growth from April through June is currently 2.4% on an annualized basis, well above estimated trend growth of around 1.8%. Even so, Pantheon Macroeconomics economists Ian Shepherdson and Kieran Clancy said consumer price inflation by the fall may have plunged to near 1% on a three-month basis.After supply problems, “revenge spending” and outsized corporate profit margins helped drive inflation above 9% in June 2022, they now argue “excess global capacity in goods, softening demand for domestic discretionary services, and margin re-compression will work its way through.””The signal for the foreseeable future is one of downward pressure everywhere.”DIFFERENT THIS TIME?The Fed next week is expected to raise interest rates by a quarter of a percentage point to the 5.25%-5.50% range, a move that would mark its 11th increase in 12 meetings since March 2022. Recent data, including lower-than-expected inflation and moderating job growth, have convinced many investors and analysts the hike will be the last of the current tightening cycle, with only 19 of 106 economists in a Reuters poll forecasting a hike after July. Fed policymakers have penciled in at least one more increase beyond that but are wrestling with how much weight to put on risks that inflation could reignite and require even higher rates versus concerns the economy has not adjusted to the increases already approved and may weaken fast.Arguments for both are well grounded. The track record for controlling high inflation without significant job losses is poor. To some policymakers, the current 3.6% unemployment rate, with annual wage growth exceeding 4%, means the job market remains too hot. That said, whenever interest rates have risen as fast as they have or inflation has fallen as much as it has, the unemployment rate eventually rises, a reason some policymakers believe the Fed has done enough and needs to give the economy time to adjust. The issue both sides are confronting is whether an economic moment that began with an unprecedented shock can evolve in unprecedented ways. Indeed, the list of things that may make this time different is lengthy.Developments typically running alongside steep Fed rate increases, for example, such as construction job losses, haven’t occurred. While higher borrowing costs hurt home construction, builders were deployed instead on factories, warehouses and infrastructure projects fueled by pandemic-era spending. Bankruptcies have started rising, reversing low pandemic-era failure rates when firms and families were sustained with various programs. But business formations remain elevated, which may support small business growth and hiring. Growth in bank lending has slowed, as it typically does when the Fed raises rates. But much of that is tied to declines in bank holdings of securities, while small businesses in a recent survey indicated they were borrowing at about pre-pandemic levels. If the trillions of dollars that households accumulated through pandemic-relief payments fueled the initial outbreak of inflation, they currently may be the buffer leading retail sales to slow, but not crater, under the weight of high interest rates. Average household war chests are now just about 15% above pre-pandemic levels, JP Morgan Chase (NYSE:JPM) Institute analysts estimated recently. The fact they have fallen that low may have begun to show up in things like a drop last month in restaurant sales, which may be bad news for eateries but a relief for Fed officials who see service-sector inflation as their biggest challenge.GOING THEIR WAYThe job market may be the biggest surprise, and an example of how parts of the economy are edging their way back to pre-pandemic years when low unemployment, low inflation and moderate wage growth coexisted, a moment the Fed aspires to replicate. The occupational and industrial mix is different, with logistics and warehousing still in a boom, while leisure and hospitality jobs remain below pre-pandemic levels in what appears to be a structural loss of employment – a new normal.But underlying dynamics like job-opening rates, worker-quit rates and wage growth are off pandemic-era highs and for some industries are nearing where they were previously – an old equilibrium that may be emerging again.Fed Governor Christopher Waller put a theoretical underpinning beneath some of it in a paper last year, arguing that inflation could ease without job losses if businesses responded to a slowdown by eliminating the excessive number of job openings but not resorting to layoffs. The jury is still out, but as of this point so far the post-pandemic economy has developed as Waller envisioned. “So far it seems to work … That does not mean to get inflation down from four to two something might not happen,” Waller said last week. “But right now things are kind of going the way I had hoped.” More

The Wednesday-to-Friday demonstrations are the third round of protests that the opposition has called this month. Several people were reported shot, some possibly fatally, on Wednesday, and several senior opposition leaders were arrested.”The voice of the people must be heard. Our peaceful protest continues,” veteran opposition leader Raila Odinga wrote on Twitter on Thursday.The Nation newspaper reported that Odinga’s Azimio party had called for its supporters to assemble at Huruma and Kangemi grounds, and Central Park in the capital Nairobi. Broadcaster NTV showed a large police deployment in anti-riot gear at Nairobi’s Jacaranda grounds, scene of opposition rallies in the past.Many shops in the city’s central business district reopened on Thursday and traffic picked up on major roads. Schools also reopened in Nairobi, the port city of Mombasa and Kisumu, the country’s third-largest city, after being shut on Wednesday. Odinga lost last August’s election to President William Ruto, his fifth election defeat in a row, and has repeatedly called for acts of civil disobedience against a government he accuses of raising the cost of living and consolidating power.Ruto has pledged to champion the interests of the poor, but the price of basic commodities has ballooned under his administration. His government argues higher taxes are necessary to help with growing debt repayments and to fund job-creation initiatives.At least 15 people were killed in the two previous rounds of protests earlier this month. Civic leaders have warned about sporadic incidents of apparent ethnic-based attacks in a country with a history of deadly political violence.”We don’t want a Kenya full of fighting. We don’t want a Kenya of destroying people’s property and roads built by Kenyans’ money,” Ruto said after commissioning a water project on Wednesday.Kenyan newspapers carried a joint editorial on Thursday titled: “Let’s save our country”.”President William Ruto and opposition leader Raila Odinga, in particular, owe it to themselves and to the people of Kenya to consider if they want more blood on their individual hands,” part of the editorial read.Odinga ally Maina Njenga, the former leader of the Mungiki criminal gang, was among those arrested on Wednesday, Njenga’s lawyer told Reuters. More

The maker of Mr Kipling cakes and Bisto gravy says it has no more price rises planned this year following a substantial easing of costs, adding to hopes that shoppers have experienced the worst of surging inflation. “We believe the recent period of significant input cost inflation is now past its peak and have no further price increases planned for the rest of 2023,” said Premier Foods chief executive Alex Whitehouse.The comments echo those made by several large food retailers in recent weeks indicating food inflation is moderating. On Tuesday Tim Steiner, Ocado’s chief executive and co-founder, said the UK was “over the worst” while Tesco chief executive Ken Murphy said in June that he believed “we’re past the peak inflation”. UK grocery price inflation eased for a fourth consecutive month to 14.9 per cent in the four weeks to July 9, according to data published by market research provider Kantar, raising hopes that lower energy and raw material costs are beginning to be reflected on supermarket shelves. Overall UK inflation fell to a 15-month low of 7.9 per cent in June, a bigger than expected drop. Premier Foods said in its trading update that sales grew 21 per cent to £231.1mn in the 13 weeks to July but warned that revenue growth was likely to moderate in the following quarters as the year-on-year impact of higher prices reduced.Although higher prices being passed on to shoppers have boosted overall revenues for food manufacturers, many have experienced a drop in volume as consumers cut consumption or traded down to cheaper and private brands as a result of the cost of living squeeze. PepsiCo, Nestlé and Unilever reported lower or flat sales volumes in their first-quarter earnings earlier this year.Investors will be watching closely to see whether sales fall further amid persistently high prices when companies report half-year results in the coming weeks. “The majority of Premier Food’s revenue growth has been price-based and that has reflected the enormous increase in costs,” said Clive Black, analyst at Shore Capital, adding that the company’s next trading update was likely to reveal disinflation but not price decreases.Premier Foods said it did not disclose volume or pricing data. Shares in the group were up 1.5 per cent in morning trading. Chancellor Jeremy Hunt said this week that “hopefully” consumers were starting to see the effects of falling energy prices in their shopping baskets. “Food inflation was driven by the global cost of energy rocketing and supply chains being hit,” he added. “Yet consumers should share the upside as both issues unwind, and we’re watching closely to make sure they do.” More

In February the United States proposed to expand offshore wind power development into the Gulf of Mexico, introducing the nascent clean energy industry into a major hub for oil and gas production.The Interior Department will announce that the sale will take place on Aug. 29, the White House said.The sale will include a lease area of 102,480 acres offshore Lake Charles, Louisiana, and two lease areas totaling nearly 200,000 acres offshore Galveston, Texas, the White House said. Companies will bid on the right to develop those acres.The Biden administration has held three offshore wind lease auctions, including the largest ever such U.S. sale last year for areas off the New York and New Jersey coasts that attracted a record $1.5 billion in bids, and the first ever off the Pacific coast in California.Biden is traveling to Philadelphia on Thursday to pitch the promise of a green economy to union workers who remain skeptical that the solar, wind and electric vehicle industries can deliver the same economic punch for organized labor as oil refineries and fossil fuel-fired power plants. More

1. Tesla margins fall; Netflix revenue disappointsShares in Tesla and Netflix both dropped in premarket trading as investors digested mixed second-quarter results from the electric carmaker and the streaming giant.For Tesla, attention centered around recent price cuts to boost volumes and combat intensifying competition in the electric vehicle market. The decision pushed revenues up to a record high of $24.93 billion during the three-month period.But the move also weighed on its gross profit margin from automotive operations, excluding the impact of regulatory credits, which dropped to 18.2% from 18.8% in the first quarter and 26.2% last year. Although that decline was not as large as many analysts had expected, Tesla’s stock still slumped after chief executive Elon Musk later suggested that more price reductions could be coming this year.Meanwhile, Netflix’s crackdown on password sharing between users appears to be working, with the company adding 5.9 million subscribers in the quarter, far above Wall Street estimates. It also told analysts that the number of canceled accounts was “low.”However, this trend was overshadowed by softer-than-anticipated revenue of $8.2B. Netflix’s third-quarter projection of $8.5B for the top-line figure missed forecasts as well. Shares in Netflix tumbled as a result.2. Nasdaq futures slumpFutures for the Nasdaq pointed lower on Thursday as results from Tesla and Netflix weighed on the broader tech sector.At 05:14 ET (09:14 GMT), Nasdaq 100 futures shed 141 points or 0.88%, pulled lower by an after-hours decline in shares of the two major tech players that extended into premarket trading.S&P 500 futures also edged down by 9 points or 0.20%, while Dow futures added 31 points or 0.09%.The broad-based Dow Jones Industrial Average posted its eighth consecutive session of gains on Wednesday, its longest winning streak since 2019. Meanwhile, the benchmark S&P 500 climbed 0.24% and the Nasdaq Composite inched up 0.03%.3. Johnson & Johnson, American Airlines highlight busy earnings dayA fresh batch of U.S. corporate earnings is scheduled to be released Thursday, with health care behemoth Johnson & Johnson (NYSE:JNJ) and carrier American Airlines (NASDAQ:AAL) among the biggest brands to report.Insurer Travelers (NYSE:TRV), investment manager Blackstone (NYSE:BX), tobacco group Philip Morris International (NYSE:PM), and regional lender Fifth Third Bank (NASDAQ:FITB) also feature on the results calendar.Earnings have largely been stronger-than-expected during this latest earnings season, fuelling hopes that this could be a sign that the U.S. economy may be able to engineer a soft landing after a series of aggressive Federal Reserve interest rate hikes. According to FactSet data cited by CNBC, three-quarters of the firms that have already reported beat Wall Street estimates.4. Apple testing ChatGPT rival – BloombergApple is developing a new generative AI program to compete with the likes of OpenAI’s ChatGPT and Google’s Bard, according to Bloomberg News.Workers at the tech giant have already constructed a framework, known as “Ajax,” the report said, citing people familiar with the matter. A chatbot dubbed “AppleGPT” is also being tested.Shares in Apple touched a fresh record high on the report, while peers such as Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA) and Google-owner Alphabet (NASDAQ:GOOGL) dropped.California-based Apple, which has stayed relatively quiet on the subject of AI despite a surge in the technology’s popularity this year, did not respond to a request for comment from Reuters.5. TSMC pessimistic on hopes for AI-driven boost in chip demandTaiwan Semiconductor Manufacturing Co (TW:2340) (NYSE:TSM) — also known as TSMC — posted second-quarter earnings that topped estimates, but the world’s biggest contract chipmaker poured cold water on expectations that the boom in AI interest will fuel a surge in chip demand.Net profit at TSMC in the three months to June 30 tumbled by more than a fifth to 181.80B Taiwan dollars, although this was still above expectations of analysts polled by Refinitiv.But, in a post-earnings webcast, chief executive C.C. Wei flagged that the rush into AI may not be long-term or sustainable. He noted that “[while] we have recently observed an increase in AI-related demand, it is not enough to offset the overall cyclicality of our business.”TSMC subsequently slashed its annual revenue guidance, saying it expects the figure to slip by 10% in 2023 versus its previous outlook for a single-digit drop. U.S.-listed shares in TSMC were lower in premarket trading Thursday.The move stood in contrast to bullish comments earlier this year from the chip industry from Nvidia, one of TSMC’s largest customers. Nvidia previously forecast a jump in semiconductor demand later this year, citing the need for computing parts to power AI programs. More

The writers say Hollywood studios are increasingly limiting their roles in television productions, highlighting a trend for white-collar workers.For the six years he worked on “The Mentalist,” beginning in 2009, Jordan Harper’s job was far more than a writing gig. He and his colleagues in the writers’ room of the weekly CBS drama were heavily involved in production. They weighed in on costumes and props, lingered on the set, provided feedback to actors and directors. The job lasted most of a year.But by 2018, when he worked on “Hightown,” a drama for Starz, the business of television writing had changed substantially. The writers spent about 20 weeks cranking out scripts, at which point most of their contracts ended, leaving many to scramble for additional work. The job of overseeing the filming and editing fell largely to the showrunner, the writer-producer in charge of a series.“On a show like ‘The Mentalist,’ we’d all go to set,” Mr. Harper said. “Now the other writers are cut free. Only the showrunner and possibly one other writer are kept on board.”The separation between writing and production, increasingly common in the streaming era, is one issue at the heart of the strike begun in May by roughly 11,500 Hollywood writers. They say the new approach requires more frequent job changes, making their work less steady, and has lowered writers’ earnings. Mr. Harper estimated that his income was less than half what it was seven years ago.While their union, the Writers Guild of America, has sought guarantees that each show will employ a minimum number of writers through the production process, the major studios have said such proposals are “incompatible with the creative nature of our industry.” The Alliance of Motion Picture and Television Producers, which bargains on behalf of Hollywood studios, declined to comment further.SAG-AFTRA, the actors’ union that went on strike last week, said its members had also felt the effects of the streaming era. While many acting jobs had long been shorter than those of writers, the union’s executive director, Duncan Crabtree-Ireland, said studios’ “extreme level of efficiency management” had led shows to break roles into smaller chunks and compress character story lines.But Hollywood is far from the only industry to have presided over such changes, which reflect a longer-term pattern: the fracturing of work into “many smaller, more degraded, poorly paid jobs,” as the labor historian Jason Resnikoff has put it.In recent decades, the shift has affected highly trained white-collar workers as well. Large law firms have relatively fewer equity partners and more lawyers off the standard partner track, according to data from ALM, the legal media and intelligence company. Universities employ fewer tenured professors as a share of their faculty and more untenured instructors. Large tech companies hire relatively fewer engineers, while raising armies of temps and contractors to test software, label web pages and do low-level programming.Over time, said Dr. Resnikoff, an assistant professor at the University of Groningen in the Netherlands, “you get this tiered work force of prestige workers and lesser workers” — fewer officers, more grunts. The writers’ experience shows how destabilizing that change can be.The strategy of breaking up complex jobs into simpler, lower-paid tasks has roots in meatpacking and manufacturing. At the turn of the 20th century, automobiles were produced largely in artisanal fashion by small teams of highly skilled “all around” mechanics who helped assemble a variety of components and systems — ignition, axles, transmission.By 1914, Ford Motor had repeatedly divided and subdivided these jobs, spreading more than 150 men across a vast assembly line. The workers typically performed a few simple tasks over and over.For decades, making television shows was similar in some ways to the early days of automaking: A team of writers would be involved in all parts of the production. Many of those who wrote scripts were also on set, and they often helped edit and polish the show into its final form.The “all around” approach had multiple benefits, writers say. Not least: It improved the quality of the show. “You can write a voice in your head, but if you don’t hear it,” said Erica Weiss, a co-showrunner of the CBS series “The Red Line,” “you don’t actually know if it works.”Ms. Weiss said having her writers on the set allowed them to rework lines after the actors’ table read, or rewrite a scene if it was suddenly moved indoors.She and other writers and showrunners said the system also taught young writers how to oversee a show — essentially grooming apprentices to become the master craftspeople of their day.But it is increasingly rare for writers to be on set. As in manufacturing, the job of making television shows is being broken down into more discrete tasks.In most streaming shows, the writers’ contracts expire before the filming begins. And even many cable and network shows now seek to separate writing from production. “It was a good experience, but I didn’t get to go to set,” said Mae Smith, a writer on the final season of the Showtime series “Billions.” “There wasn’t money to pay for me to go, even for an established, seven-season show.”Showtime did not respond to a request for comment. Industry analysts point out that studios have felt a growing need to rein in spending amid the decline of traditional television and pressure from investors to focus on profitability over subscriber growth.In addition to the possible effect on a show’s quality, this shift has affected the livelihoods of writers, who end up working fewer weeks a year. Guild data shows that the typical writer on a network series worked 38 weeks during the season that ended last year, versus 24 weeks on a streaming series — and only 14 weeks if a show had yet to receive a go-ahead. About half of writers now work in streaming, for which almost no original content was made just over a decade ago.Members of the Writers Guild of America have been on strike since May.Mark Abramson for The New York TimesMany have seen their weekly pay dwindle as well. Chris Keyser, a co-chair of the Writers Guild’s negotiating committee, said studios had traditionally paid writers well above the minimum weekly rate negotiated by the union as compensation for their role as producers — that is, for creating a dramatic universe, not just completing narrow assignments.But as studios have severed writing from production, they have pushed writers’ pay closer to the weekly minimum, essentially rolling back compensation for producing. According to the guild, roughly half of writers were paid the weekly minimum rate last year — about $4,000 to $4,500 for a junior writer on a show that has received a go-ahead and about $7,250 for a more senior writer — up from one-third in 2014.Writers also receive residual payments — a type of royalty — when an episode they write is reused, as when it is licensed into syndication, but say opportunities for residuals have narrowed because streamers typically don’t license or sell their shows. The Alliance of Motion Picture and Television Producers said in its statement that the writers’ most recent contract had increased residual payments substantially.(Actors receive residuals, too, and say their pay has suffered in other ways: The streaming era creates longer gaps between seasons, during which regular characters aren’t paid but often can’t commit to other projects.)The combination of these changes has upended the writing profession. With writing jobs ending more quickly, even established writers must look for new ones more frequently, throwing them into competition with their less-experienced colleagues. And because more writing jobs pay the minimum, studios have a financial incentive to hire more-established writers over less-established ones, preventing their ascent.“They can get a highly experienced writer for the same price or just a little more,” said Mr. Harper, who considers himself fortunate to have enjoyed success in the industry.Writers also say studios have found ways to limit the duration of their jobs beyond walling them off from production.Many junior writers are hired for a writers’ room only to be “rolled off” before the room ends, leaving a smaller group to finish the season’s scripts, said Bianca Sams, who has worked on shows including the CBS series “Training Day” and the CW program “Charmed.”“If they have to pay you weekly, at a certain point it becomes expensive to keep people,” Ms. Sams said. (The wages of junior writers are tied more closely to weeks of work rather than episodes.)The studios have chafed at writers’ description of their work as “gig” jobs, saying that most are guaranteed a certain number of weeks or episodes, and that they receive substantial health and pension benefits.But many writers fear that the long-term trend is for studios to break up their jobs into ever-smaller pieces that are stitched together by a single showrunner — the way a project manager might knit together software from the work of a variety of programmers. Some worry that eventually writers may be asked to simply rewrite chatbot-generated drafts.“I think the endgame is creating material in the cheapest, most piecemeal, automated way possible,” said Zayd Dohrn, a Writers Guild member who oversees the screen and stage master’s degree program at Northwestern University, “and having one layer of high-level creatives take the cheaply generated material and turn it into something.”He added, “It’s the way coders write code — in the most drone-like way.” More